Threat of Italy government crisis recedes but only for now

August 05, 2013|Reuters

* Berlusconi calms waters with conciliatory speech

* Potential for disaster could return after summer break

* Berlusconi's party has no alternative leader

By Barry Moody

ROME, Aug 5 (Reuters) - The threat of an Italian governmentcrisis following former prime minister Silvio Berlusconi's taxfraud conviction receded on Monday but the situation remainsvolatile and could erupt again after the summer break.

The supreme court's decision on Thursday to confirm afour-year jail sentence for Berlusconi, commuted to one year,sparked severe tensions between his centre-right party and thecentre left of Prime Minister Enrico Letta, partners in a shakygovernment.

This led to fears over the weekend that the three-month-oldgovernment would collapse at a time when Italy desperately needsaction to recover from its worst post-war recession. Such acrisis in the euro zone's third-largest economy would sendrenewed tremors through the bloc.

But after a heated debate between hawks and doves inBerlusconi's People of Freedom (PDL) party, the media mogulcalmed the waters at a rally of his supporters on Sundayevening, where he said that the government should continue forthe sake of the country.

Sources in Napolitano's palace said they had made requestsof the head of state but in a more measured tone than some PDLhawks who have demanded a pardon for the 76-year-oldbillionaire. No details were available on what they suggested.

Experts and presidential aides say Napolitano cannot pardonBerlusconi for several legal and institutional reasons, but thePDL wants him to somehow prevent the removal of a leader forwhom 10 million Italians voted in February.

The PDL has no viable alternative leaders although the courtdecision has led to speculation that Berlusconi may be replacedby his daughter Marina, 46, who leads his business empire.

At his rally on Sunday, a tearful Berlusconi, watched withconcern by his 28-year-old girlfriend Francesca Pascale, saidthe last few days had been the most painful of his life. But hesaid he refused to give up and would fight on.

Letta's Democratic Party (PD) says the law must take itscourse and could rebel if extraordinary measures are used to getBerlusconi off the hook.

The respite for Letta's embattled government may only betemporary, encouraged for the moment by the slow justice system,parliament's summer recess and the sacrosanct exodus of Italiansto the beaches and mountains in August.

Berlusconi has until mid October to decide whether he wantsto serve his one-year sentence doing community service or underhouse arrest. Because of his age he is not expected to go tojail. However, police have already confiscated his passport.

His fellow senators could take until the end of the year tovote on whether to evict him from parliament.

Letta cautiously welcomed Berlusconi's support for thegovernment but added: "We will be able to verify concreteactions over the next few days."

Former centre-left leader Pier Luigi Bersani, who lost hisjob after Berlusconi almost beat him in February's vote, said hesaw "a very complicated course from September onwards" if thePDL could not separate the fate of its leader from itsresponsibilities.

Despite the potential for a government collapse, analystspoint out that an election soon could be a disaster, not justfor the country but for the two major parties themselves.

If they are seen to have plunged Italy into new uncertaintyfor purely party political reasons, they could be severelypunished by an angry electorate and lose more ground to thepopulist 5-Star Movement of comedian Beppe Grillo, which took anunprecedented quarter of the vote in February.